Friday, May 17, 2013

Budget deflects attention away from constitutional change referendum

Tuesday's federal budget has been treated with the disdain it deserves.

Probably the funniest part of the night was when the Treasurer, Wayne Swan, talked about locking in spending and savings ''for 10 years and beyond''. Given the government hardly knows what's going to happen in the next 10 minutes, it's difficult to take seriously anything it says about what will happen in a decade.

The problem with the budget is that it has got in the way of something far more important. Two weeks ago the Prime Minister announced that on September 14 (the same day as the federal election) there will be referendum to change the constitution to give the Commonwealth government the power to make financial payments to local councils. The Commonwealth already does make payments to local government and this year councils will get about $2.6 billion from Canberra.

The justification for the amendment is that giving the federal government the explicit power to pay money to councils will remove any doubt about whether such payments are in fact allowed under the constitution. The lingering fear of both federal MPs and local councillors is that one day there will be a majority of judges on the High Court who are not left-leaning and who don't favour giving Canberra more power at the expense of the states, and such a majority will declare such payments from the federal government to be unconstitutional.

The referendum should be receiving more attention than it has so far. As soon as the Prime Minister said the proposal was ''modest'' (as she said twice), warning bells should have started ringing. Whenever a politician talks about a modest change the chances are the change is anything but.

A change of the sort the Gillard government wants would be a disaster for democracy in Australia. In the short term it will lead to less accountability over public services as potentially the same thing will be funded and administered by all three levels of government at the same time. In the medium term, local councils will become redundant as the Commonwealth government will itself seek to manage the programs which it funds local council to deliver. There is nothing the Commonwealth has ever financed which ultimately it hasn't wanted to run. Further, the Commonwealth will override local councils' own rules and by-laws in an effort for the it to get its own way. That is exactly what happened with the so-called Building the Education Revolution program. Local council planning laws were suspended because the Labor government wanted as many school halls built as quickly as possible.

In the long term, state governments will become obsolete. The Commonwealth government will use local councils (or what will be left of them) to deliver the services, particularly health and education that state governments currently provide but are financed by the commonwealth.

If the referendum passes, it will be the end of the idea that in Australia the power of government should be divided and distributed between the Commonwealth government and the states. Liberals and conservatives favour a federal system of government because only a federation allows for one level of government to act as a restraint against the other. The checks and balances of a federal system are why so many in the Labor Party want to abolish state governments.

It's no surprise the ALP and the Greens have enthusiastically embraced the referendum — $11 million was allocated in the Tuesday’s budget for publicity for the ''Yes'' case. But what is surprising that rather than fighting the referendum tooth and nail, the federal Coalition is trying to finesse the situation by avoiding saying exactly what its position is.

When Gough Whitlam in 1974 offered up a similar referendum to what Julia Gillard now wants, the Coalition campaigned vigorously against it and was defeated. In 1988, Bob Hawke's referendum was also defeated as result of strong opposition from the Coalition. In the past 25 years the federal government has not revealed itself to be any more competent or effective than in 1988. There's no justification to give it more power in 2013.

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RICHARD J WOOD

Today, those who subscribe to the principles of individual liberty, limited government, the free market, and the rule of law call themselves by a variety of terms, including conservative, libertarian, classical liberal, and liberal.

I see problems with all of those terms.

"Conservative" smacks of an unwillingness to change, of a desire to preserve the status quo.

Only in Australia do people seem to refer to free-market capitalism — the most progressive, dynamic, and ever-changing system the world has ever known — as conservative.

Additionally, many contemporary Australian conservatives favour state intervention in some areas, most notably in trade and into our private lives.

"Classical liberal" is a bit closer to the mark, but the word "classical" connotes a backward-looking philosophy.

Finally, "liberal" may well be the perfect word in most of the world — the liberals in societies from China to Iran to South Africa to Argentina are supporters of human rights and free markets — but its meaning has clearly been corrupted by contemporary Australian liberals.

The philosophy that animates my work has increasingly come to be called "libertarianism" or "market liberalism."

It combines an appreciation for entrepreneurship, the market process, and lower taxes with strict respect for civil liberties and scepticism about the benefits of both the welfare state and foreign military adventurism.

The market-liberal vision brings the wisdom of the Australian Founders to bear on the problems of today.

As did the Founders, it looks to the future with optimism and excitement, eager to discover what great things women and men will do in the coming century.

Market liberals appreciate the complexity of a great society, they recognise that socialism and government planning are just too clumsy for the modern world.

It is — or used to be — the conventional wisdom that a more complex society needs more government, but the truth is just the opposite.

The simpler the society, the less damage government planning does.

Planning is cumbersome in an agricultural society, costly in an industrial economy, and impossible in the information age.

Today collectivism and planning are outmoded and backward, a drag on social progress.

Market liberals have a cosmopolitan, inclusive vision for society.

We reject the bashing of gays, Japan, rich people, and immigrants that contemporary liberals and conservatives seem to think addresses society's problems.

We applaud the liberation of blacks and women from the statist restrictions that for so long kept them out of the economic mainstream.

Our greatest challenge today is to extend the promise of political freedom and economic opportunity to those who are still denied it, in our own country and around the world.